These 8 States Will Tax Your Social Security — Are You in One?

For most American retirees, the monthly Social Security deposit is a lifeline—a hard-earned return on decades of work. But depending on where you live, the state government might be taking a cut of that check before it ever hits your bank account.

While the federal government taxes Social Security for many seniors, the vast majority of states—41 of them, plus the District of Columbia—keep their hands off your benefits. However, a shrinking list of states still taxes Social Security income, potentially costing residents hundreds or even thousands of dollars per year.

If you live in one of the eight states listed below, you need to know the rules. The good news? Most of these states have recently updated their laws to offer generous exemptions, meaning middle-income retirees often pay nothing. Here is exactly where the map stands for the 2025 tax year.

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The “Tax Trap”: Federal Taxes Come First

Before diving into state rules, it is crucial to remember that Uncle Sam gets “first dibs.” Regardless of where you live, the federal government taxes your Social Security if your Provisional Income exceeds certain limits.

Provisional Income Formula:
Adjusted Gross Income (AGI) + Nontaxable Interest + 50% of your Social Security Benefits

Individuals: If your provisional income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. Above $34,000, up to 85% is taxable.
Married Couples (Joint): If your provisional income is between $32,000 and $44,000, up to 50% is taxable. Above $44,000, up to 85% is taxable.

Once you’ve handled the federal side, you have to look at your state return. If you live in one of the following eight states, you might owe an additional tax.

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The 8 States That Still Tax Social Security (2025)

Note: This list covers the 2025 tax year (the return you will file in early 2026). Rules change frequently, so always verify your specific situation with a local tax professional.

1. Colorado

Colorado has one of the most generous exemptions, especially for older seniors, but it still lands on the “tax” list for those under age 65.

Age 65+: You are effectively exempt. As of 2025, taxpayers 65 and older can deduct the full amount of their federally taxable Social Security benefits from their state income.
Age 55–64: You can deduct your Social Security benefits only if your Adjusted Gross Income (AGI) is $75,000 or less (single) or $95,000 or less (married filing jointly). If you earn more, your benefits may be taxed at the state’s flat rate of 4.4%.

2. Connecticut

The “Constitution State” has high taxes generally, but it has carved out a safe zone for low-to-middle-income retirees.

Exempt: If your AGI is less than $75,000 (single/married filing separately) or roughly $100,000 (married filing jointly), your Social Security benefits are 100% exempt from state taxes.
Taxable: If your income exceeds those thresholds, you can still deduct 75% of your Social Security income, but the remaining 25% will be subject to state tax.

3. Minnesota

Minnesota uses a complex subtraction rule. While it is one of the less friendly states for retiree taxes, recent legislation has raised the income limits significantly.

Exempt: For the 2025 tax year, single filers with an AGI up to roughly $82,000 and married couples up to roughly $105,000 are typically fully exempt (thresholds are adjusted annually for inflation).
Taxable: If your income is above these limits, the exemption “phases out,” meaning you lose a portion of the deduction for every dollar you earn above the threshold. High earners in Minnesota will likely pay state tax on their benefits.

4. Montana

Montana is in a transition period. While the state has passed legislation to eventually eliminate the tax on Social Security, it still applies for the 2025 tax year.

The Rule: Montana taxes Social Security similarly to the federal government but with different specific deductions.
Good News for 2026: The state is scheduled to fully exempt Social Security benefits starting with the 2026 tax year (returns filed in 2027). For now, however, check your 2025 income against the current state brackets.

5. New Mexico

New Mexico has aggressively updated its tax code to attract retirees, but high earners still pay.

Exempt: Social Security is tax-exempt for single filers with an AGI under $100,000 and married couples with an AGI under $150,000.
Taxable: If you earn even one dollar over these limits, the exemption may not apply, potentially exposing your benefits to state taxation. (Note: New Mexico’s rules have been in flux, so double-check the latest forms for “cliff” provisions).

6. Rhode Island

Rhode Island protects lower-income seniors but taxes those with healthier nest eggs.

Exempt: You must have reached your Full Retirement Age (FRA) (typically 66 or 67) and have an AGI below roughly $107,000 (single) or $133,000 (married) to qualify for the exemption (2025 inflation-adjusted estimates).
Taxable: If you take benefits early (before FRA) or earn above the income limits, your Social Security is fully taxable at Rhode Island rates.

7. Utah

Utah does things differently. Instead of an exemption (a deduction from income), it offers a tax credit.

The Credit: You calculate your tax, and then Utah gives you a non-refundable tax credit to offset the liability generated by your Social Security income.
The Catch: The credit phases out once your income hits certain levels (approx. $45,000 for singles and $75,000 for couples, though subject to legislative adjustments). This means higher-income retirees in Utah effectively pay a tax on their Social Security because they lose the credit that would otherwise cancel it out.

8. Vermont

Vermont has some of the strictest thresholds on this list, meaning more middle-class retirees might face a bill here than elsewhere.

Exempt: Full exemption is available only if your AGI is $50,000 or less (single) or $65,000 or less (married).
Phase-Out: There is a “buffer zone” (up to $60,000 for singles and $75,000 for couples) where you get a partial exemption.
Taxable: Once you cross that upper threshold, your benefits are fully taxable at Vermont’s graduated income tax rates.

“Retirement taxes are often the biggest surprise for seniors. You spend 40 years saving, only to find out that your pension, 401(k), and Social Security might all trigger a tax bill depending on your zip code.” — Jean Chatzky, Financial Editor

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What About West Virginia? (The “9th” State)

You may see West Virginia on some lists, and technically, it does still tax Social Security for the 2025 tax year—but it is on its way out.

The state is in the final year of a three-year phase-out plan. For 2025, qualifying seniors can deduct 65% of their Social Security benefits. By 2026, the tax is scheduled to be eliminated entirely. So, while you might owe a little this year, relief is imminent.

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3 Common Mistakes to Avoid

Living in one of these states doesn’t guarantee you’ll owe taxes. Avoiding these common errors can help you keep your bill at zero.

Ignoring Required Minimum Distributions (RMDs): At age 73, you must start withdrawing from pre-tax IRAs. These withdrawals count as income, which raises your AGI. A higher AGI can push you over the exemption thresholds in states like Connecticut, New Mexico, or Vermont, suddenly making your Social Security taxable.
Filing Status Errors: In states like Colorado and Rhode Island, the income limits for married couples are not double the single limits. If you are married but filing separately, you might inadvertently disqualify yourself from exemptions.
Forgetting to Claim the Exemption: In many states, the tax isn’t automatically waived; you have to claim a specific deduction or credit on your state tax return form. If you or your tax software misses that checkbox, you will overpay.

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Actionable Steps to Protect Your Income

If you live in a taxable state and are near the income threshold, consider these strategies:

Roth Conversions: Distributions from a Roth IRA generally do not count toward your AGI. Converting traditional IRA funds to Roth (before you retire or during low-income years) can keep your taxable income lower in retirement.
Manage Withdrawals: If you are close to a “cliff” (like New Mexico’s strict cutoff), delay a large IRA withdrawal until January of the following year to keep your current year’s income under the limit.
Check for Other Breaks: Some states, like Colorado, offer huge deductions for all retirement income (pensions/annuities) up to a certain amount ($20,000 or $24,000), which might cover your Social Security even if the specific Social Security exemption doesn’t apply.

State tax laws are moving fast. Missouri, Nebraska, and Kansas all recently stopped taxing Social Security. If you live in one of the eight states above, stay alert—legislatures are constantly facing pressure to join the “tax-free” club.

Last updated: February 2026. Benefit amounts, tax rules, and program details change annually—verify current figures with official government sources.